Protectionism: Not Dead Yet

Paul Krugman has a post in which he proclaims "The Death of Protectionism." He refers to this chart from the ITC:

And he says:

In doing course prep for trade policy, I looked, as I always do, at the latest edition of the USITC publication on the economic effects of import restrictions — and discovered that my subject was gone. At least according to the ITC estimates, there’s almost nothing left to talk about.

...

What happened? Mainly the end of the Multi-Fiber Agreement; also, US and world sugar prices have converged. But now that protectionism is a trivial issue, what will economists inveigh against?

I commented on a similar issue once before, but I think it's worth repeating.

The ITC chart shows tariffs falling from about 3.5% in 1993 to under 1.5% in 2011. That sounds like they started low and got lower.

But it's important to note that these are average tariffs. Tariffs on certain goods are still quite high. A publication called World Tariff Profiles illustrates this nicely. If you look at p. 170 for U.S. statistics, you will see MFN applied duties for four separate product categories of over 10%. You'll also see maximum tariffs of over 100%!

And none of that includes trade remedy tariffs, subsidies, or domestic measures such as local content requirements.

Some day I would like to see us all put out of business, as free trade reigns supreme. But don't worry, trade lawyers and economists, your job is secure for the foreseeable future. Protectionism lives!

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Protectionism: Not Dead Yet

Paul Krugman has a post in which he proclaims "The Death of Protectionism." He refers to this chart from the ITC:

And he says:

In doing course prep for trade policy, I looked, as I always do, at the latest edition of the USITC publication on the economic effects of import restrictions — and discovered that my subject was gone. At least according to the ITC estimates, there’s almost nothing left to talk about.

...

What happened? Mainly the end of the Multi-Fiber Agreement; also, US and world sugar prices have converged. But now that protectionism is a trivial issue, what will economists inveigh against?

I commented on a similar issue once before, but I think it's worth repeating.

The ITC chart shows tariffs falling from about 3.5% in 1993 to under 1.5% in 2011. That sounds like they started low and got lower.

But it's important to note that these are average tariffs. Tariffs on certain goods are still quite high. A publication called World Tariff Profiles illustrates this nicely. If you look at p. 170 for U.S. statistics, you will see MFN applied duties for four separate product categories of over 10%. You'll also see maximum tariffs of over 100%!

And none of that includes trade remedy tariffs, subsidies, or domestic measures such as local content requirements.

Some day I would like to see us all put out of business, as free trade reigns supreme. But don't worry, trade lawyers and economists, your job is secure for the foreseeable future. Protectionism lives!